Rowhouse Rehab: Where, Oh Where, Has My Contractor Gone?

We paid our kitchen contractor two-thirds of the total—before two-thirds of the work was done.

For years, my parents’ backyard in New Jersey had no deck—but it had a deck frame. One spring, my father hired a builder to make a deck and gazebo, promised to be completed before summer barbecue season. We paid him an advance, the frame was constructed and my father handed over some more money. And that was the last we ever saw of the contractor. It took years before my dad accepted the loss and just hired someone else to finish the job.

So learned the lesson at an early age. Don’t trust your contractor.

Use personal references to find one. Get everything in writing. Stay ahead in terms of payments versus work to be completed. And having bought and renovated three properties before this grand project without any major issues made me think we were savvy. In hindsight, we were just lucky.

Here’s where we find ourselves: We paid our kitchen contractor two-thirds of the total—before two-thirds of the work was done. He said he was traveling, then said he had a death in the family, then said his mobile wasn’t working and then just stopped returning our calls and text messages. The subcontractor, who also alleges nonpayment from the contractor, has agreed to finish the work—but at a premium. Because we’ve lost about three weeks on the job due to all the starts, stops, absconding, excuses, we’re going ahead and eating the loss. It’s about $3,000, which means we likely won’t redo the bathroom this year or tile the basement so it can be used as a playroom. I’m filled with rage every time I think about that—and every night when we’re still ordering takeout.

How could we have avoided this situation? After talking to friends, it’s clearly not uncommon. After talking to lawyers, however, it’s clearly preventable—and fightable. Here are some tips from real-estate lawyer Jeffrey S. Ween of Jeffrey S. Ween & Associates.

1. Get it in writing. That entails the scope of work, the payment schedule, payment schedule, the timing of the work. Be specific, as in, the paint will be completed before receipt of second payment. “More than less is better. If it isn’t in writing, all kinds of problems can ensue,” says Mr. Ween. He also says to draft a contract anticipating such problems and to word it in such a way that both parties know their obligations. Mr. Ween recommends the American Institute of Architects’ standard contract forms, available here.

2. The initial payment for work should be enough that the contractor can buy materials and pay subcontractors. “Something in the neighborhood of a third is a reasonable amount,” says Mr. Ween. Remaining payments should be marked by milestones along the way, and noted in the contract. The final payment must be enough to make it worth the contractor’s while to actually finish the job. “It should be substantial enough that the contractor has incentive to get to completion,” says Mr. Ween. “Many times the project ends as a failure of any more momentum.” He advises performing a final inspection upon completion of the job. This is the time to ask for holes to be patched and those switch plates to be screwed back in place.

3. Consider charging for delays. A typical scenario, Mr. Ween describes: “The guy promised you he’d be done in three months and here it is six months later. It’s Thanksgiving and you invited 20 people over.” A contract can impose a daily fine for every day the project is late. It also can offer a grace period—say, five days after the estimated date of completion—before fines are levied.

4. If they leave… A client has a few recourses if unsatisfied with a contractor’s work (or if he or she disappears). A complaint can be made to the relevant licensing authority, for example. You can also take the contractor to small-claims court, depending on the amount of damages sought. If it’s substantially more than the small-claims limits in your area, Mr. Ween suggests consulting a lawyer. Damages might mount higher if you can prove injury from not having the ability to use the space (our takeout bills, for example). “The more established the contractor, the easier it is,” he says. “Assuming you are dealing with someone who is established with a legitimate business, you can collect what you are owed.”

5. Your turn… In the comments section, please share your own renovation horror stories and any advice you have.